The European Union has adopted the world’s first comprehensive set of rules to regulate cryptoassets, setting a global standard and putting pressure on other countries to catch up.

The rules, which were approved by EU finance ministers on Tuesday, aim to protect investors, prevent money laundering and terrorism financing, and ensure fair taxation in the fast-growing sector.

The rules are expected to be rolled out from 2024 and will require firms that want to issue, trade and safeguard cryptoassets, tokenised assets and stablecoins in the 27 country bloc to obtain a licence.

They will also make crypto transactions more transparent by requiring service providers to obtain the name of senders and beneficiaries in cryptoassets from January 2026.

The EU’s move comes after the collapse of crypto exchange FTX, which exposed the risks and gaps in regulation of the sector.

“Recent events have confirmed the urgent need for imposing rules which will better protect Europeans who have invested in these assets, and prevent the misuse of crypto industry for the purposes of money laundering and financing of terrorism,” said Elisabeth Svantesson, finance minister for Sweden, which holds the EU presidency.

The EU’s rules are likely to influence other countries that are grappling with how to regulate cryptoassets, such as Britain and the United States.

Britain has outlined a phased approach, starting with stablecoins and broadening out to un-backed cryptoassets later on, but there is no firm timetable.

The United States has focused on using existing securities rules for enforcement action in the sector while it decides on whether to introduce bespoke new rules and who would apply them.

Hester Peirce, one of the commissioners at the U.S. derivatives regulator CFTC, said last week that a number of federal and state authorities are trying to figure out what oversight role they could play in the crypto sector.

“We are wandering in the desert a bit,” Peirce told a conference.

According to some sources¹², the EU crypto rules are a positive development that will boost the benefits and curb the threats of cryptoassets. The rules will provide legal certainty, support innovation, protect consumers and investors, ensure financial stability, and prevent money laundering and terrorism financing. The rules will also set a global standard and encourage other countries to follow suit.

According to other sources³⁴, the EU crypto rules could have some negative impacts on the markets. The rules could stifle innovation, create barriers to entry, increase costs and complexity, and reduce competitiveness and diversity in the sector. The rules could also create regulatory arbitrage and fragmentation, as some countries may adopt different or more lenient approaches.

In conclusion, the EU crypto rules could have both positive and negative impacts on the markets, depending on the perspective and interests of different stakeholders. The effects of the rules will depend on how they are implemented and enforced, and how they interact with other regulations and developments in the sector.

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